We reported earlier this year on the new Article 4 restrictions hitting HMO landlords who were already subject to licensing and the topic has been hot ever since. Now landlords face the increasing creep of licensing and regulation ahead of possible significant restrictions from Europe. Wales has taken the first step towards a national programme by announcing they will regulate landlords. Student properties will also be covered across parts of England by a new accreditation scheme. Here we’ll examine the current state of play and what lies ahead for landlords.
We covered off in detail the regulations regarding what is an HMO (house in multiple occupation) and when it would be licensed in our video presentation. For a while now anyone owning a property intended for occupation by several (non family) people was required to be licensed by their local council. Much as the planning restrictions are, this licensing was also controlled locally with rules varying somewhat between councils.
New Proposed Landlord Licensing in Wales
Although just at white paper stage currently the legislations looks to have garnered significant support in the Welsh assembly and is expected to pass in some form. It is looking for a full registration: “Accreditation will secure full registration status, which is effectively a licence to operate as a private landlord in Wales”. Landlords will not only have to register but they will need to be assessed with regard to their ‘fit and proper’ status before they can operate as a landlord in Wales. Agents have long been criticised by consumers and they will also be captured by the new legislation which will include a set of minimum standards.
The problem with this creeping legislation is that it will restrict access to property at a time when there is already a significant shortfall in the supply of private rented accommodation in the UK. Licensing is notoriously slow and it is not inconceivable that landlords will be waiting for months before receiving their license. Many landlords will simply avoid Wales if they are not already operating in that jurisdiction to avoid the hassle and this will route much needed investment away from the region. For those who do continue to operate, rents will likely need to be increased to cover the increased cost of regulation which could see residents facing increased cost and lower availability of property. It’s worth noting that the government appears to struggle to enforce existing legislation and the roll out of similar rules to the entire UK would put a great deal of strain on existing infrastructure.
Landlords Renting to Students Face Accreditation Scheme
Accommodation For Students is rolling out a new accreditation which will be promoted throughout the coming months. It will impact landlords across this sector as it seeks to improve the quality of student housing stock. Unlike many other schemes landlords will need to comply with an initial inspection of all properties followed by a reinspection every three years. It is likely that many official student housing organisations and Universities will prefer or only deal with accredited landlords or at least advise their students to do the same. This will probably lead to most landlords in the sector being forced to undergo this additional step. Whilst, again, we fully support improving the quality of housing stock for tenants we do question the value of additional red tape at a time when there are shortages.